Reliance-Disney $8.5bn merger could harm competition: CCI

The Competition Commission of India (CCI), after an assessment, on Tuesday warned that the ambitious $8.5-billion India merger between Reliance and Walt Disney could harm the existing market of the other players, primarily owing to the power that the two conglomerates wield over cricket broadcast rights.

The CCI, the primary competition regulator in India and a statutory body within the Ministry of Corporate Affairs, has asked the two companies in question why a probe into the matter should not be initiated, according to a report by Reuters.

While a merger between Reliance, which owns the OTT platform JioCinema, and Walt Disney, whose online entertainment platform is Disney+, would impact the streaming market across all segments, the main bone of contention, the agency quoted sources, was cricket.

As of now, Reliance’s Viacom18 owns the television broadcast rights for domestic and international cricket matches that the Board of Control for Cricket in India (BCCI) organises. Disney currently has television rights for the Indian Premier League (IPL) until 2027.

On the streaming front, Disney owns digital rights for International Cricket Council (ICC) matches in India until 2027, while JioCinema owns streaming rights for IPL until 2027.

The announcement of the $8.5-billion merger was made in February this year, whereby the Reliance Group, owned by billionaire Mukesh Ambani, would own 63 per cent stake in the new company while Disney would own the rest.

The new platform created would bring together 120 TV channels owned by the two media houses, as well the two streaming apps, JioCinema and Disney+ Hotstar. Beyond cricket coverage, the new platform, a gigantic entity, would pose stiff competition when it comes to disseminating entertainment for rival companies including Netflix, Amazon Prime Video, Sony and Zee Entertainment.

The Reliance-owned Viacom18 has 40 television channels including Comedy Central, the Colors channels and Nickelodeon. Disney Star, has around 80 channels including general entertainment channels, besides English and Hindi movie channels. Both conglomerates cover regional language shows, too.

On the streaming front, the merger will lead to Reliance’s JioCinema and Disney’s Hotstar owning a library of content worth more than 2,00,000 hours including series and films.